Managerial Economics

Managerial Economics

Managerial Economics

Introduction

Prices in free marker are determined by the supply and demand concept. For instances, if supply is higher than the demand ultimately prices of the particular products will go down. Similarly, if demand is higher than supply of particular product then ultimately prices would be going up. The theory of perfect competition market states the conditions that take place in market. Since, market comprise of different type of competitions, this competition is based on goods and services offered by different companies. Furthermore, the sellers, buyers, prices and different goods formulate the type of competition in the market. In this paper, the focus would be on examining the factors that determine the price of mobile telephone devices in a free market and analysis with the aid of a diagram how prices have changes over last 3 years.

Discussion

Overview of the industry

The following are the trends, competitive Landscape and Prospects of UK mobile telephone devices for three years.

UK mobile subscription 2010 to 2012

Source: Mobile Market Trends: UK

Trends

The usage of mobile phone in UK has increased and this trend has been continuously growing. According to eMarketer, in 2013 there are approximately 30.9 million smart phone users in UK. The operating system in Smartphone i.e. Android has been reviewed by researchers and it showed that consumers and manufactures has started accepted this system in their mobile phone and demand for more advance technology in their mobile devise (Ofcome, 2011, pp. 17). HTC and Samsung after this reaction have started to expand their Android Territory in UK. Nevertheless, iPhone 4S by Apple has ruled the smart phones sales chart ever since it has been launched in middle year of 2011.

Furthermore, Samsung has not only managed to sustain stable momentum rather they have also emerged as the clear winner in UK during 2011 with Smart phone environment. Considering this, new technology or system in mobile leads to increase overall cost of the product. Hence increase demand of mobile phone has increase competition in market and this is the reason why price in current era has been reduced (euromonitor).

Competitive Landscape

During 2011, the performance of Samsung Electronics was strong in mobile phone area with the volume increase to 23% from 16% in 2011 and 2010 respectively. This increase was due to the success of their smart phones. As far as Nokia is concern, they experienced decline to 20% from 27% in 2011 and 2010 respectively. The reason for this was that they were not moving towards Android due to which consumer was moving towards other brands. Competition was increasing since mobile market has been defined as Pure Competition market where no single buyer or seller can influence products. Anyone can easily enter in the market offering similar product with additional advancement in it (euromonitor).

Prospects

In UK, smart phones would be continuing to increase growth in the category of mobile phone, though the environment for mobile phone would be stable with the volume CAGR of ...